We're all inundated with credit card deals. There are so many sometimes that you don't even look at them-you just shred them right in the envelope. But you can take advantage of all those credit card deals to personalize your financial management plan. They give you a lot of choice, and that gives you the opportunity to find the best credit card deal to fit your lifestyle and personality.
Self Assessment: Your Credit Score Is PriorThe first step in creating a personalized credit card plan is to ask yourself some questions. What's your credit like? Do you have no credit history? Is your credit it great, or are you among those with poor credit? How do you manage your credit card balances? Do you pay them off each month, or do you always carry a balance? Do you pay just the minimum monthly balance, or do you budget to pay the balance down? What do you use credit cards for? Do you travel a lot? Do you shop at particular stores? What stage of life are you in? Are you a student, single, married with kids, retiree? Next, look at your spending history. Pull out your bank, credit card and other statements for the past year or so. Look at what you spend money on. You might even set up a spread sheet with some categories on it, or use a money management program to help you. Here are some things to assess regarding your spending: Where does your money go? What do you spend it on? Do you use cash, debit or credit? How much interest have you paid over the past year? Your credit score gives you a picture of reality. You may discover that you spend more money (or less) on some things than you thought you did. You may be shocked at how much you spend on latte's or shoes or sporting events. Now it's time to set some goals. What do you want to spend your money on? How much do you want to save or to give to charity? Do you want to pay off debt or invest for your retirement? Give yourself two or three financial goals that you can accomplish this year. They could be as simple as, "Keep track of my spending," or as challenging as "Start an IRA and contribute the maximum amount to it." Decide how you will accomplish those goals, and give yourself some action steps. Those Credit CardsNow you have the information you need to use those credit cards for your personalized financial management plan. You know a bit more about yourself and how you use money and you have some goals. The questions you asked will help you choose the best credit card or deals for your lifestyle. For instance: If you are a student or single young adult and have no credit, you might get a secured credit card so that you can build your credit history. The same goes if you have bad credit. You can use a secured credit card to repair it, so look through those envelopes and find the best secured credit card deal and apply for it. If you travel a lot, maybe you should get a credit card that gives you frequent flyer miles. If you're one of those well-disciplined people who pays off your cards every month, a credit card with a rewards or a cash back credit card would be good for you. If paying off your debt is one of your goals, consider using one of your credit card balance transfers to move your balances to a 0% APR card. A lot of people get into trouble with credit cards and sometimes we only the downside of having them. Having a credit card, or a combination of credit cards, can be a good thing. It can help you meet your financial goals. By assessing your personality and spending habits, you can choose the credit card deal that best matches your lifestyle and helps you achieve your goals.
|
